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Fossil Fuel Subsidies

Have you ever wondered what government benefits the fossil fuel industry enjoys? Here is a comprehensive breakdown: Fossil Fuel Subsidies.

Spread the Word

Klassy Evans and Adam Khan, editors of this web site and authors of the book Fill Your Tank With Freedom, would love to talk to your group about fuel competition. Print out this PDF document to bring to your group's program director: Saving Lady Liberty. It prints best if you download the file to your computer and then print it.

Monday, June 13, 2011

The food industry spent considerable time and money in 2007 and 2008 turning the public against ethanol, using underhanded tactics and misleading information. As you talk about the Open Fuel Standard to your friends and family, you will find that the food industry's propaganda campaign was fairly successful. For a lot of people, as soon as you bring up the word "ethanol," they have a strong negative reaction to it. Growing our own fuel will raise food prices, they will be quick to tell you. It will cause starvation and "it takes more energy to make than you get out of it."

Where did these strong beliefs come from? They were orchestrated by a combination of the livestock industry, the big food corporations, and the oil industry.

The oil industry is understandable. But why the food industry? Because the processed food conglomerates want grain to be as cheap as possible. High fructose corn syrup in particular is a widely used and important sweetener for the food industry, particularly for carbonated beverages.

A little known fact, however, is that when grains are too abundant and too inexpensive it causes major problems with food growers in America. And America's cheap grain on the world market has ruined the livelihoods of small farmers around the world.

Because American farmers were so successful at growing corn, their high yields threatened to bankrupt them because they couldn't sell their corn for enough money to stay in business. In fact, the ethanol industry in the U.S. was a solution to that problem. They searched for other markets for their corn, and found ethanol.

But the processed food industry liked the days of overabundant, ultra-cheap grain, so they mounted a campaign against the ethanol industry, blaming ethanol on rising food costs, even though it was clear that rising oil prices had the largest impact on rising food prices. But food lobbyists teamed up with lobbyists from the livestock industry to ruin the U.S. ethanol industry. The livestock industry likes cheap grain too. The cheaper the better. Read all about the whole sordid affair:

"Big Food and their Washington lobbyists have been trying to blame the rising cost of food on American ethanol producers and the cost of corn. Well, now that the price of corn has dropped more than 50% since the summer, we ask the Big Food industry to explain to the American people why food prices are still so high," said Jeff Broin, chief executive of Poet. "The lies the Big Food lobby has been spreading about clean, green biofuels have finally been exposed as an intellectually dishonest smear campaign. It's wrong and we're coming together to ask Big Food to give struggling Americans a break."

The Grocery Manufacturers Association hired a public relations firm last spring to mount advertising and media campaigns aimed at blaming increased food costs on biofuels production, centering their premise on a claim that the increased price of corn forced food producers to raise food prices.

The campaign has been used to deflect attention from Big Food's profit growth. Kraft revenues have increased nearly 20% this year and net income shot up to $1.4 billion in the fourth quarter of 2008. Sales at Kellogg's climbed 9.5% and third-quarter net income increase from $305 million last year to $342 million this year.

"The U.S. Department of Energy estimates that for every one billion gallons of ethanol produced, 10,000 to 20,000 jobs will be added," Rastetter said. "In 2007, the ethanol industry contributed $47.6 billion to the nation's GDP, created more than 200,000 jobs and generated an estimated $4.6 billion in revenues for the federal government."

Now the number of people employed in America by the ethanol industry is 400,000.

The ethanol industry gets subsidies. How do those factor into the equation? Gal Luft, executive director of the Institute for the Analysis of Global Security and co-founder of the Set America Free Coalition, has an answer: